Denny’s confirms permanent restaurant closure with note on door after signs were torn down – town now reduced to one

The city of Lubbock, Texas, has lost a popular breakfast spot as chain restaurants and stores across the country face an uphill battle.

Lubbock residents were excited to enjoy their Grand Slam breakfast this morning when they arrived at the Denny’s location on Avenue Q.

3

3

3

But instead they were served a dish of disappointment. When hungry customers approached the door, they found a sign hanging there.

“This Denny’s restaurant is permanently closed,” the sign said, encouraging them to visit the other Denny’s in the area about five miles away.

Lubbock has a population of 263,930, according to the 2022 census, and is the 10th most populous city in Texas.

This means that almost all 300,000 residents in the area will be forced to travel to one location, which could cause long waits and a drop in service quality.

Since 2020, Denny’s has been in crisis nationwide, closing nearly 60 stores nationwide in the last year alone.

But does not stop there. Last month, Denny’s revealed another 25 restaurants closed in the first quarter of this year alone, almost half the number of closures last year.

The reason for these closures, according to Denny’s Chief Financial Officer Robert Verostek, is that the franchise is struggling to recover financially after surviving the pandemic.

During February earnings call For the last quarter of 2023, Verostek revealed that customer traffic decreased by around 6% compared to the same period in 2022.

Traffic also decreased approximately another 6% in the first three months of 2024, Restaurant Business Magazine reported.

For a Denny’s to be profitable enough to sustain itself, the restaurant would need to bring in at least $1.2 million in annual sales, Verostek said during the February conference call.

Thomas Pilbeam, a franchisee who operated 27 different Denny’s restaurants in Michigan, Ohio and Kentucky, says his locations experienced “substantial growth” from 2009 to 2019.

But in 2020 everything changed.

Pilbeam, along with many other business owners, have been hit by severe economic challenges due to the pandemic.

Restaurant Closings in 2024

BOSSes of major restaurant chains have announced a series of restaurant closures. The US Sun has compiled a list of those affected by the network.

• Biscuit Barrel: Stores in Medford, Oregon, Columbia, South Carolina and Sacramento, California, closed.
• Mod Pizza: Bosses drastically closed 27 stores, including in the state of California.
• Frisch’s Big Boy: Restaurant bosses have confirmed the closure of a restaurant in Covington, Kentucky.
• Two dolars: Four restaurants in Ohio are set to close.
• Pepper: A restaurant in Port Arthur, Texas, has closed permanently.
• Friendly: Bosses have confirmed that an establishment in Ronkonkoma, Long Island, will close.
• Pizza Hut: A restaurant in Glen Falls, New York, closed at the end of March.
• Danny: Two restaurants in Boise and Nampa, Idaho, have closed.

This, combined with other ongoing negative conditions in the restaurant industry – such as rising labor, food and delivery costs, as well as needed renovations and post-pandemic trends toward increased delivery sales – have added up. to your financial problems.

Despite having total revenues of more than $17.6 million, Pillbeam accumulated a negative commercial net income of $1.3 million, leading it to file for Chapter 11 bankruptcy in October of last year after being reduced to just 8 locations.

Denny’s is undergoing several changes in an attempt to refresh its brand, including the launch of a new menu, an updated loyalty program with monthly challenges and even virtual brands.

In January, Denny’s entered into a 250-unit partnership with Franklin Junctiona virtual restaurant brand that specializes in “driving restaurants into the digital age,” according to its website.

Through this collaboration, Denny’s has begun hosting new “virtual concepts across its vast restaurant footprint,” Franklin Junction CEO Rishi Nigam said in a statement.

Denny’s began adopting this approach in 2021 with other brand partnerships in an effort to “build market share,” according to Denny’s CEO John Miller.

The first partnership, The Burger Den, focused on the chain’s favorites and added exclusive new menu items in 2021, followed by The Melt Down, which featured handcrafted sandwiches with fresh ingredients like sausage, pickles, turkey and bacon.

However, the influence of virtual brands on the company’s sales remains uncertain.

Online brands added approximately $1,000 per store per week to Denny’s same-store sales. This number has shown little change since 2021.